Toll operator rejects takeover by Canadian pension funds

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11/5/2009

Australian toll-road operator Transurban, a company working to build new toll lanes on the Capital Beltway in Washington, DC, has rejected a buyout offer from two Canadian pension funds.

Transurban informed its investors on Thursday, Nov. 5, that the company had received “an incomplete, highly conditional and non-binding” offer from the Canadian Pension Plan Investment Board and the Ontario Teachers’ Pension Plan, and had “rejected it on its current terms.”

The offer, according to company statements, was $5.25 Australian per security.

Transurban officials say they are not ruling out a future deal, provided that an offer provides value and certainty for security holders.

The Canadian pension funds are reportedly branching out to invest $190 billion in infrastructure and other alternative funds after taking losses in other markets due to the economy. With that kind of cash, they would rival the world’s top infrastructure investors.

More about Transurban
In 2006, Sydney-based Transurban broke into the North American toll market by bidding $548 million for the rights to operate and collect tolls on the Pocahontas Parkway in Richmond, VA.

More recently, Transurban partnered with Fluor Enterprises on a project to construct 14 miles of high-occupancy toll lanes, known as HOT lanes, on the Capital Beltway in DC. The Beltway project is scheduled for completion in 2013.

When completed, the HOT lanes will carry a variable toll rate as part of a plan to manage congestion.